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DECREE

ON TRANSFORMATION OF STATE COMPANIES INTO ONE-MEMBER LIMITED LIABILITY COMPANIES AND MANAGEMENT OF STATE-OWNED ONE-MEMBER LIMITED LIABILITY COMPANIES

THE GOVERNMENT

Pursuant to the December 25, 2001 Law on Organization of the Government;

Pursuant to the November 26, 2003 Law on State Enterprises;

Pursuant to the November 29, 2005 Law on Enterprises;

At the proposal of the Minister of Planning and Investment,

DECREES:

Chapter I

GENERAL PROVISIONS

Article 1. Scope of regulation

This Decree provides for the transformation of state companies into one-member limited liability companies and management of State-owned one-member limited liability companies.

Article 2. Subjects of application

1. Enterprises eligible for transformation as defined in Article 7 of this Decree.

2. State-owned one-member limited liability companies.

3. Organizations and individuals involved in the transformation, management and operation of State-owned one-member limited liability companies.

Article 3. The owner and assignment and decentralization of the exercise of lights and performance of obligations of the owner towards one-member limited liability companies

The State is the owner of one-member limited liability companies whose charter capital is wholly held by it. The Government shall uniformly organize the exercise of rights and performance of obligations towards one-member limited liability companies whose charter capital is wholly held by the State. The rights and obligations of the owner of a one-member limited liability company transformed from a state company or newly established shall be exercised and performed by only one organization assigned or decentralized as follows:

1. The Prime Minister or a specialized organization assigned by the Government shall exercise the rights and perform the obligations of the owner of one-member limited liability companies transformed from parent companies of state economic groups, state corporations or large-sized or important state companies established under the Prime Minister's decisions.

2. Ministries and People's Committees of provinces and centrally run cities (below referred to as provincial-level People's Committees) shall be decentralized to exercise the rights and perform the obligations of the owner of one-member limited liability companies transformed from:

a) State companies directly serving national defense and security or performing public-utility tasks, which are established under decisions of ministries or provincial-level People's Committees;

b) Parent companies in state corporations, state companies organized after the parent-affiliate company model; independent state companies; agricultural companies, forestry companies, state-owned agricultural farms and forestry fauns established under decisions of ministries or provincial-level People's Committees and eligible for equitization but not yet transformed before July 1, 2010.

3. Parent companies in the parent-affiliate company model, parent companies of state economic groups are owners of one-member limited liability companies transformed or reorganized from independent-accounting member companies, dependent-accounting member units of state corporations or state economic groups; parent companies in state corporations belonging to state economic groups; affiliate companies and dependent-accounting member units of parent companies; one-member limited liability companies newly established by parent companies.

4. The Slate Capital Investment Corporation is the owner of one-member limited liability companies transformed from independent state companies established under decisions of ministries or provincial-level People's Committees, except companies specified in Clauses 1, 2 and 3 of this Article and other companies as decided by the Prime Minister.

5. Owners of one-member limited liability companies have the rights and obligations provided for in Articles 64.65 and 66 of the Law on Enterprises, this Decree and the company charters.

6. State management agencies not assigned or decentralized to exercise the rights and perform the obligations of the owner of one-member limited liability companies mentioned in Clauses 1 and 2 of this Article may only perform the state management function under the Law on Enterprises and relevant laws regarding one-member limited liability companies in sectors they are in charge of. The Ministry of Finance shall guide the financial and profit distribution mechanisms applicable to one-member limited liability companies.

Article 4. Transformation expenses

1. Transformation expenses shall be accounted as a decrease in equity capital.

2. Transformation expense items and levels

shall be prescribed by the Ministry of Finance.

Article 5. Inheritance of rights and obligations of enterprises before transformation

One-member limited liability companies shall inherit legitimate rights and interests and obligations of transformed enterprises in accordance with law.

Article 6. Application of relevant laws

1. The transformation of state companies into one-member limited liability companies and management and operation of State-owned one-ember limited liability companies comply with the Law on State Enterprises, the Law on Enterprises, this Decree and other relevant laws.

2. In case of inconsistency between this Decree's provisions and relevant provisions of the law on state economic groups regarding the management, supervision and valuation by the State owner of parent companies being wholly state-owned enterprises of state economic groups: the rights and obligations of the State owner's direct representatives at parent companies of state economic groups, the latter will prevail.

Chapter II

ELIGIBLE SUBJECTS OF CONDITIONS, ORDER AND PROCEDURES FOR TRANSFORMATION

Article 7. Eligible subjects

1. Independent slate companies.

2. State companies being parent companies of state economic groups: parent companies in state corporations; parent companies in corporations belonging to state economic groups; parent companies operating after the parent-affiliate company model (below collectively referred to as parent companies).

3. Independent-accounting member companies of state corporations or state economic groups.

4. Dependent-accounting member units of state corporations, parent companies of state economic groups and parent companies of state corporations.

5. Agricultural companies, forestry companies, state-owned agricultural farms and forestry farms.

Article 8. Transformation conditions

1. Enterprises specified in Article 7 of this Decree may be reorganized or transformed into one-member limited liability companies when fully meeting the following conditions:

a) Being subjects specified in Clauses 1. 2 and 5. Article 7 of this Decree in sectors, domains or areas in which the State needs to hold 100% of their capital: and approved by the Prime Minister.

Parent companies in corporations belonging to state economic groups and subjects specified in Clauses 3 and 4. Article 7 of this Decree whose charter capital needs not to be whole held by the State and which play a particularly important role in production or business operations or development strategies or hold business know-how, technologies and information of these corporations or groups and whose charter capital needs to be wholly held by these corporations or groups;

b) Still having state capital after die financial handling. In case they have no state capital left, they shall report such to the Prime Minister for decision on addition of state capital. It capital addition is not allowed, they may undergo the form of ownership transformation specified in Article 80 of the Law on State Enterprises.

In case they conduct business lines for which legal capital levels are specified by law, their (projected) charter capital must not be fewer than those legal capital levels.

2. In addition to the conditions specified in Clause 1 of this Article, the subjects specified in Clause 4. Article 7 of this Decree must also meet the following conditions:

a) They can be divided into independent-accounting units:

b) The transformation of dependent-accounting member units into one-member limited liability companies will neither cause difficulties to nor affect production or business efficiency of state corporations or parent companies.

3. Enterprises eligible for equitization which have not yet undergone equitization or are currently carrying out the order and procedures for their transformation into joint-stock companies and for which there will be no decision of a competent authority on the enterprise value by July 1, 2010.

After being transformed into one-member limited liability companies, enterprises specified in Clause 3 of this Article shall be further transformed into join-stock companies according to roadmaps approved by the Prime Minister.

Article 9. Order for transformation of independent state companies, parent companies, independent-accounting member companies, dependent-accounting member units of state corporations or state economic groups

1. Notification of transformation plans and roadmaps:

Based on the Prime Minister-approved overall scheme on reorganization of wholly state-owned enterprises, persons assigned to exercise the rights and perform the obligations of the owner shall notify enterprises of transformation plans and roadmaps.

2. Setting up of an enterprise transformation committee:

a)The Prime Minister shall authorize Boards of Directors of parent companies of state economic groups or corporations established under the Prime Minister's decisions to decide to set up transformation committees of these companies. Ministers or chairpersons of provincial-level People's Committees shall decide to set up transformation committees of enterprises established under their decisions. Boards of Directors of parent companies of state economic groups or corporations shall decide to set up transformation committees of member enterprises of state economic groups or corporations.

b) An enterprise transformation committee is composed of the head who is the Chairman of the Board of Directors or Director General (Director) of the company, a standing member who is the Chief Accountant, and members who may be the grassroots trade union leader, heads of sections or divisions for enterprise renewal and development, planning, business, organization and personnel, and labor. The committee may invite the secretary of the Party Committee (Party cell) to join as a member.

The enterprise transformation committee shall organize the performance of jobs involved in the transformation of the enterprise into a one-member limited liability company.

3. Transformed enterprises shall notify their employees of transformation plans and roadmaps within 10 days after being notified under Clause 1 of this Article.

4. Elaboration of a transformation scheme, covering:

a) Preparing dossiers and documents related to the enterprise transformation;

b) Inventorying, classifying and identifying capital and assets currently managed or used by the enterprise.

Assets currently managed or used by an enterprise include assets currently used by the enterprise; assets not needed for use; assets awaiting liquidation; wasted or lost assets and other asset losses of the enterprise: leased or borrowed assets, assets kept for consigned to safe-keeping by or received as joint-venture or association capital contributed by other enterprises; redundant assets; receivables; payables; and irrecoverable receivables;

c) Listing and classifying employees, and working out a plan on the use of land areas currently managed by the enterprise;

d) Working out a plan on financial and asset handling: a plan on employee rearrangement: and a financial statement and projected charter capital.

Enterprises specified in Clause 3. Article 8 of this Decree are not required to plan and conduct the asset and financial handling, employee rearrangement and land use.

5. Building of an organizational model and structure of the one-member limited liability company; drafting of the charter.

Appraisal, approval and implementation of the transformation scheme and decision:

a) The person who has decided on the enterprise establishment shall appraise and approve the transformation scheme submitted by the independent state company or parent company;

b) The Board of Directors of a state corporation or parent company of a state economic group or corporation shall appraise and approve the transformation scheme submitted by a member company of the state economic group or corporation;

c) The enterprise transformation committee shall organize the implementation of the transformation scheme.

7. Appointment of an authorized representative of the owner and managerial and executive post holders:

The Prime Minister shall appoint members of the Members' Council, controllers and the Chairman of the Members' Council of the one-member limited liability company being a parent company of a state economic group or a parent company transformed from a corporation established under the Prime Minister's decision at the request of the line minister. Agencies and organizations assigned or decentralized to exercise the rights and perform the obligations of the owner specified in Article 3 of this Decree shall appoint members of the Members" (Council, controllers, the Chairman of the Members Council or the President.

The Members' Council or the President shall appoint or hire the Director General.

For enterprises with a board of directors, the owner shall issue decisions to re-appoint members of Boards of Directors as members of the Members' Councils and Chairmen of Boards of Directors as Chairmen of the Members' Councils.

8. Business registration.

9. Sending of the transformation decision to the enterprise's creditors and notification thereof to its employees:

Within 15 days after the transformation decision is issued, the enterprise shall send the decision to its creditors and notify its employees thereof.

Article 10. Order for transformation of corporations which have been invested in and established by the State into State-owned one-member limited liability companies

1. State corporations shall carry out their transformation after the parent-affiliate company model concurrently with the formation of parent companies being State-owned one-member limited liability companies.

2. The order and procedures for the reorganization and transformation of state corporations after the parent-affiliate company model comply with the Government's Decree

No. 111/2007/ND-CP of June 26, 2007, on the organization and management of state corporations and transformation of state corporations, independent state companies and parent companies being state companies after the parent-affiliate company model to operate under the Law on Enterprises.

3. The order and procedures for the formation of parent companies in the form of one-member limited liability companies comply with Article 9 of this Decree.

Article 11. Competence to decide on transformation

1. The Prime Minister shall decide or authorize ministers to decide on the transformation and transformation roadmaps of enterprises established under his)her decisions.

2. Ministers and chairpersons of provincial-level People's Committees shall decide on the transformation and transformation roadmaps of enterprises established under their decisions and of member companies of state corporations or economic groups when so authorized by the Prime Minister.

3. Boards of Directors of parent companies or state corporations shall decide on the transformation and transformation roadmaps of subjects specified in Clauses 3 and 4, Article 7 of this Decree.

Article 12. Tasks of enterprises in elaborating transformation schemes

1. A corporation which has been established and invested in by the State has the following tasks:

a) To scrutinize its member units against transformation conditions; to determine a structure and work out a tentative plan on the formation of a parent company in the form of one-member limited liability company; to work out a tentative plan on the transformation of affiliate companies being one-member limited liability companies owned by the parent company and a tentative plan on the equitization of member units;

b) To inventory, classify and identify existing capital, assets, debts and employees and land areas currently managed by the corporation, member units or units expected to make up the parent company; to make a financial statement up to the time of transformation, covering the actual situation of investment and capital contribution by the corporation and member units to other enterprises;

c) To work out a tentative plan on asset, financial and debt handling and employee rearrangement, and a tentative plan on the transfer of rights, obligations, assets, capital, debts and employees to the parent company; to determine a capital amount to be registered as the parent company's charter capital; to coordinate with concerned state agencies in addressing according to their competence existing capital, financial and employee problems of the parent company at the time of transformation under Article 13 of this Decree;

d) To draft the charters of the parent company and affiliate companies expected to be transformed into one-member limited liability companies.

2. The subjects specified in Article 7 of this Decree have the following tasks:

a)To inventory, classify and identify existing capital, assets, debts and employees and land areas currently managed by the company; to make a financial statement up to the time of transformation, covering the actual situation of investment and capital contribution by the corporation to other enterprises:

b) To work out a tentative plan on asset, financial and debt handling and employee and used land rearrangement, and a tentative plan on the transfer of rights, obligations, assets, capital, debts, employees and land areas to the one-member limited liability company: to determine a capital amount to be registered as the company's charter capital; to coordinate with concerned state agencies in addressing according to their competence existing capital, finance, employee and land problems of the company at the time of transformation under Article 13 of this Decree;

c) To draft the charters of one-member limited liability companies.

Article 13. Principles of handling capital, assets, finance and employees upon transformation

1. Capital, assets, finance and employees of a corporation which has been established and invested in by the State and is reorganized after the parent-affiliate company model shall be handled on the following principles:

a) All assets of the corporation and its member units shall be valuated upon its transformation;

b) For assets managed and used by the corporation's member units expected to be transformed to form a parent company being a one-member limited liability company, the enterprise shall inventory, classify, quantify, and evaluate the state of, them for transfer to the one-member limited liability company;

c) For assets which are leased, borrowed, kept for or consigned by others for safe-keeping, or received as joint-venture or partnership capital contributions, the transformed enterprise shall reach agreement with the lessors, lenders, consignors, depositors and contributors on letting the one-member limited liability company to take over or liquidate the signed contracts;

d) For assets no longer needed, left unsold, awaiting liquidation, wasted or lost, the enterprise shall transfer, sell, liquidate or handle them under current regulations:

e) For redundant assets, the enterprise shall account them as an increase in the equity capital in the enterprise;

f) For receivable debts, the corporation's member units expected to be transformed to form a parent company shall take up receivable debts of the transformed enterprise and seek measures to recover due debts before transformation. By the time of transformation, any bad debts shall be handled under the State's current regulations on the handling of bad debts;

g) For payable debts, the enterprise shall take over debts payable to its creditors as committed, including also tax and state budget remittance arrears, debts owed to its officials and employees: and pay due debts. Unclaimed debts and assets with unidentifiable owners shall be included into equity capital. In case the company encounters difficulties in paying overdue debts, these debts shall be handled under the State's current regulations on the handling of outstanding debts;

h) The enterprise shall rearrange and employ its existing employees under the laws on labor and reorganization of state companies; implement regimes towards laid-off employees on the principle that each enterprise may receive only a once-off allocation from the State for implementing these regimes; and take over all rights and obligations towards its employees under the labor law.

2. Capital, assets, finance and employees of a transformed company shall be handled on the following principles:

a) All assets of the company shall be valuated upon its transformation;

b) For assets managed and used by the company, the enterprise shall inventory, classify, quantify and evaluate the state of. them for transfer to the one-member limited liability company. Forest land and assets thereon shall be transferred in their original state to the one-member limited liability company under the guidance of the Ministry of Finance and the Ministry of Agriculture and Rural Development;

c) The principles specified at Points c. d. e. f. g and h. Clause 1 of this Article.

3. Financial statements approved by the owner's representatives are those made at the time one-member limited liability companies receive business registration certificates.

Article 14. Determination of charter capital

1. The charter capital of a parent company formed from the reorganization or transformation of a corporation which has been established and invested in by the State after the parent-affiliate company model is a state capital amount actually existing after the financial handling on the principles specified in Clause 1, Article 13 of this Decree and stated in the parent company's charter.

2. The charter capital of a one-member limited liability company transformed from a parent company, independent state company or independent-accounting member company of a corporation is an equity capital amount actually existing after the financial handling on the principles specified in Clause 2. Article 13 of this Decree and stated in the company's charter.

The Ministry of Finance shall guide the determination of the charter capital of a one-member limited liability company transformed a dependent-accounting unit.

3. Based on the objectives, tasks and development strategy of a company, the person who has decided on the transformation or his) her authorized person shall reach agreement with the Ministry of Finance on its charter capital level (increased or decreased) and sources for charter capital supplementation under the Ministry of Finance's guidance.

Article 15. Charters of one-member limited liability companies

The charter of a one-member limited liability company shall be approved by its owner and contains the following principal details:

1. Name and address of the head office of the company; its branches and representative offices (if any).

2. Business objectives and lines.

3. Charter capital: methods of charter capital adjustment.

4. Name, address, rights and obligations of the organization assigned or decentralized to exercise the rights and perform the obligations of the owner.

5. Organizational and managerial structure of the company.

6. The representative at law of the company.

7. Mode of adoption of the company's decisions; principle(s) for resolving internal disputes.

8. Bases for and methods of determining remunerations, wages and bonuses for managers and controllers.

9. Principle(s) for division of after-tax profits and handling of business losses of the company.

10. Cases of dissolution and procedures for liquidation of assets of the company.

11. Methods of modifying and supplementing the company's charter.

12. Full names and signatures of the representative at law and representatives of organizations assigned or decentralized to exercise the rights and perform the obligations of the company owner.

13. Other lawful details as decided by the organization assigned or decentralized to exercise the rights and perform the obligations of the company owner.

Article 16. Submission, approval and implementation of transformation schemes

1. To-be-transformed enterprises shall submit their transformation schemes to competent persons defined in Article 11 of this Decree for issuance of transformation decisions.

A transformation decision must contain:

a) Name, address and account number of the transformed enterprise; name and address of the one-member limited liability company;

b) Business lines;

c) Charter capital of the company;

d) Name and address of the organization assigned or decentralized to exercise the rights and perform the obligations of the owner and individuals appointed as authorized representatives to exercise the rights and perform the obligations of the company's owner;

e) Responsibilities of the company to take over the rights and obligations and to solve existing and arising problems of the transformed enterprise.

2. To-be-transformed enterprises shall

implement approved transformation decisions.

Article 17. Business registration

Transformed enterprises shall make business registration and publicly announce it in the mass media under the Law on Enterprises. \ business registration dossier must comprise the transformation decision and other documents specified by the Law on Enterprises.

Article 18. Re-registration of asset ownership

After being granted a business registration certificate, a one-member limited liability company shall carry out procedures for re­registering the ownership of assets transferred from the transformed enterprise to the company at a state agency competent to grant registration. The re-registration of asset ownership is free from registration fee.

Chapter III

MANAGEMENT OF STATE-OWNED ONE-MEMBER LIMITED LIABILITY COMPANIES

Article 19. Application of company management models and structures

1. Parent companies of economic groups or those transformed from state corporations have a structure consisting of a Members' Council, Director General and controllers.

Management structures of parent companies operating in special sectors or domains shall be decided by the Prime Minister.

2. For companies not mentioned in Clause 1 of this Article, based on the scale, geographical scope and number of business lines of each company, the owner shall decide to adopt a management structure after the model of Members' Council. Director General and controllers or the model of President. Director

General (Director) and controllers; and decide whether or not the Company President will concurrently act as the Director General.

Section I

COMPANY MANAGEMENT AFTER THE MODEL OF MEMBERS' COUNCIL

Article 20. Tasks, powers and obligations of the Members' Council

The tasks powers and obligations of the Members' Council in Clause 1 Article 68 of the Law on Enterprises are specified as follows:

1. To elaborate and decide on development strategies; long-term, medium-term and annual plans of the company; to decide on plans on business coordination among member units whose charter capital is wholly owned by the company or in which the company holds shares or to which the company contributes controlling capital portions (if any) by exercising the control right of the company to dominate these enterprises.

2. To decide on the development and use of brands; market and technological development solutions: specialization, cooperation, access to, expansion and sharing of information, market, scientific and technological research and application between the company and its member enterprises (if any); investment projects, purchase and sale, borrowing, lending and other contracts valued at under 50% of total asset value stated in the latest financial statement of the company or at a lower percentage stated in the company charter, or not exceeding the maximum value stated in the company charter.

3. To decide to establish, reorganize, dissolve or transform affiliate companies being one-member limited liability companies; one-member limited liability companies owned by affiliate companies whose charter capital is wholly held by the parent company; dependent units of the parent company: domestic or overseas branches and representative offices of the parent company under law.

4. To decide on tentative plans on raising capital amounts not exceeding the charter capital or a smaller value stated in the company charter, or not exceeding the maximum value level stated in the company charter.

5. To decide on the organizational structure, business organization plans, internal management regulations and payrolls of the management apparatus.

6. The Members' Council of a parent company of a state economic group transformed into a one-member limited liability company may decide on salary grades and ranks, unit salary and salary payment regime applicable to employees and managers of the one-member limited liability company based on the State-prescribed minimum wage level and on the principle that the average salary increase rate is lower than the labor productivity increase rate, except those of the titles of Company President, Members' Council members, Director General, Deputy Director General (directors in charge of specific lines or domains), Chief Accountant and Controller of the company which shall be decided by the company owner.

7. To decide on the appointment, dismissal or removal from duty of, signing of contracts or termination of existing contracts with, commendation, disciplining, salaries and other benefits of the Director General of the company. To decide on the appointment, dismissal or removal from duty of, signing of contracts or termination of existing contracts with, salaries and other benefits of Deputy Directors General (directors in charge of specific lines or domains) and Chief Accountant of the company at the request of the Director General.

8. To nominate representatives of the company's capital contributions to other enterprises at the request of the Director General.

9. To decide on the following important matters of affiliate companies:

a) For a one-member limited liability company owned by the company: To decide on the application of a management structure after the model of Members' Council or Company President; membership of the Members' Council; appointment, dismissal, removal from duty, commendation, disciplining, remunerations or salaries of members of the Members' Council. Company President and controllers; approval of the company charter as well as amendments and supplementations thereto; objectives, orientations, development strategies, long-term plans, addition of business lines, adjustment of the charter capital, investment projects, purchase) sale contracts, borrowing or lending contracts or other contracts falling within the deciding competence of the company's owner; approval of the company finalization reports and annual plans on the use of after-tax profits;

b) For a joint-stock company or a limited liability company with two or more members in which the company has a dominant shares or capital portions: To direct the company's representative in using the dominant right or veto in deciding to approve, amend or supplement the company charter: objectives, orientations, development strategies, long-term plans, addition of business lines, investment projects, purchase and sale contracts, borrowing or lending contracts and other contracts falling within the deciding competence of the Board of Directors or the

Members' Council; to mobilize more shares or make more capital contributions: to approve finalization reports and tentative annual plans on the use of after-tax profits of enterprises in which the company has dominant shares or capital contributions:

c) For dependent-accounting units, non-business units and financial companies (if any): To approve operation statutes of dependent-accounting units and non-business units: lo adopt draft charters of financial companies (if any) before submitting them to the State Bank Governor for approval.

10. To examine and supervise the company's Director General; the Chairman and members of the Members' Council or the President and controllers of a one-member limited liability company owned by the company, directors of financial companies (if any) and representatives of the company's capital contributions to other enterprises in performing the functions and tasks specified in the Law on Enterprises and this Decree.

11. To adopt annual financial statements of the company; consolidated financial statements of a group of companies or a state economic group.

12. The Members' Council's decisions on the following issues must be approved by the owner:

a) Development strategies: long-term, medium-term or annual plans of the company; the portfolio and main business lines and lines unrelated to main business lines: adjustment or addition of main business lines of the company; highly risky sectors, domains, geographical areas and projects:

b)Approval of investment projects; purchase and sale, borrowing or lending contracts and other contracts of a value exceeding the level specified in Clause 2 of this Article;

c) Approval of plans to raise capital exceeding the level specified in Clause 4 of this Article;

d) Decisions specified in Clause 3 of this Article; making of capital contributions to other companies: a change in the ownership structure of affiliate companies which will paralyze the dominating right of the company:

e) Adjustment of the company's charter capital: transfer of part or the whole of the company's charter capital to other organizations and individuals;

f) Approval of finalization reports; tentative plans on the use of profits after fulfillment of tax obligations and other financial obligations of the company; tentative plans on the offsetting of losses in business operation;

g) Amendments and)or supplements to the company charter;

h) Appointment, hire, dismissal, removal from duty of. or signing or termination of a contract with, the Director General;

i) Other issues specified in the company charter.

To organize the implementation of decisions adopted by the company owner.

To report to the company owner on the company's business results.

To be held responsible before the company owner and law for the exercise of its powers and performance of its tasks and for the company's development according to the objectives and tasks assigned by the owner or under the company management contract.

In case it lets the company suffer losses or a decrease in the ratio of profits to equity capital or fails to fulfill the objectives and tasks assigned by the owner or targets stated in the company management contract but is unable to give objective reasons acceptable to the owner, its members shall be removed from duty or obliged to pay damages under law.

16. Other rights and tasks as specified in the company charter, the Law on Enterprises and relevant laws.

Article 21. Members of the Members' Council

1. A Members' Council is composed of not more than 7 persons including full-time and part-time members. The company owner shall decide on the number and structure of members of the Members' Council. Particularly, the Member’s Council of a parent company of a state economic group is composed of between 5 and 9 persons.

2. A member of a Members' Council must satisfy the following basic criteria:

a) Permanently residing in Vietnam. The Chairman of the Member's Council must be a Vietnamese citizen;

b) Possessing a university degree and being capable of conducting business operations and managing enterprises. The Chairman of the Member's Council must have at least 3 years' experience in managing and administering an enterprise operating in the company's main business lines;

c) Having good ethical quality and a good sense of law observance, and being physically fit, honest, incorruptible and knowledgeable about law;

d) Being neither leading officials in the state apparatus or political or socio-political organizations nor managers or executives in member enterprises:

e) Not being banned from holding managerial or executive posts in enterprises under Points b. c. e, f and g. Clause 2. Article 13 of the Law on Enterprises:

f) Other criteria indicated in the company charter.

3. The Chairman and members of the Members' Council shall be appointed, dismissed, commended or disciplined under the company owner's decisions. The term of office of a member of the Members' Council shall be indicated in the company charter but must not exceed 5 years. Members of the Members' Council may be re-appointed or replaced.

4. A member of the Members' Council shall be dismissed and replaced in the following cases:

a) He)she violates law seriously enough to be prosecuted or is dismissed or replaced in cases indicated in the company charter; in this case, the Members' Council and controllers may request the owner to add or replace such member of the Members' Council;

b) He)she is incapable or unqualified for performing assigned tasks; his)her civil act capacity is lost or restricted;

c).He)she resigns;

d) There is a decision to transfer or rearrange him)her to another job;

e) He)she is dishonest in exercising his)her powers or abusing his)her position or powers for self-seeking purposes or for gaining benefits for others:

f) The company fails to fulfill its obligations or objectives assigned by the owner but cannot give objective reasons acceptable to the owner:

g) Other cases decided by the company owner and compliant with the company charter.

5. Members of the Members' Council shall take joint responsibility before the person(s) having issued decisions on their appointment and before law for the Members' Council decisions which cause damage to the company and its owner, except those who vote against these decisions: and perform the obligations specified in Article 72 of the Law on Enterprises.

6. The working regime of the Members Council must comply with Article 68 of the Law on Enterprises.

Article 22. Chairman of the Members Council

1. The Chairman of the Members" Council shall be appointed by the company owner among members of the Member’s Council. The company charter must state that the Chairman of the Members' Council or the Director General is the company's representative at law.

The Chairman of the Members' Council of a parent company of an economic group or a parent company transformed from a corporation established under the Prime Minister's decision may not concurrently act as Director General: for other companies, whether the Chairman of the Members' Council concurrently acts as Director General shall be decided by the company owner.

In case the Chairman of the Members' Council is expected to concurrently act as Director General, the following conditions must be satisfied:

a) He)she is requested by the enterprise and expresses in writing his)her wish to concurrently act as Director General ;

b) He)she is physically fit and satisfies the criteria and conditions specified for both posts:

c) Functions, tasks, powers and responsibilities of the Chairman of the Members' Council and the Director General are separately specified:

d) He)she will be responsible for the functions, tasks and roles of the Chairman of the Members' Council and the Director General.

2. The Chairman of the Members' Council shall exercise the rights and perform the tasks specified in Clause 2, Article 49 of the Law on Enterprises and other rights and tasks specified in the company charter; explain and take responsibility to the owner for delaying or refusing to sign decisions of the Members' Council.

Article 23. Director General

1. The Director General is the person administering the company's day-to-day operations according to the objectives, plans and resolutions and decisions of the Members' Council and in compliance with the company charter; and shall take responsibility before the Members' Council and law for the exercise of his)her vested rights and performance of his)her assigned tasks.

2. The Director General has the tasks and powers specified in Article 70 of the Law on Enterprises and the following tasks and powers toward member units:

a) To work out and submit to the Member's Council tentative plans on business coordination among member units; to organize the implementation of common business coordination plans and investment plans among member units;

b) To examine member units in realizing set norms, standards and unit prices within groups of companies or a group;

c) To request the Members" Council to decide on the appointment of representatives of the company's capital contributions to other enterprises.

3. The Director General shall perform the obligations specified in Article 72 of the Law on Enterprises and other obligations specified in the company charter and the contract signed with the Members' Council (if any).

Article 24. Relationship between the Members' Council and the Director General in management and administration

1. When organizing the implementation of a resolution or decision of the Members' Council, if detecting a matter unfavorable to the company, the Director General shall report it to the Members' Council for consideration and modification of that resolution or decision. The Members' Council shall consider the Director General's report on the unfavorable matter. In case the Members' Council refuses to modify that resolution or decision, the Director General shall still implement it but may further report it to the company owner.

2. Within 15 days after the end of a month, quarter or year, the Director General shall send a written report on the company's current operation and orientations for the coming period to the Members' Council.

3. The Chairman of the Members' Council may attend or send a representative of the Members' Council to attend briefing meetings or meetings chaired by the Director General for preparing schemes to be submitted to the Member’s Council. The Chairman or representative of the Members' Council may present his)her opinions at these meetings but may not make final conclusions.

4. In case the Director General is not concurrently a member of the Members' Council, he)she may be invited to attend meetings of the Members' Council and may present his)her opinions but may not vote at these meetings.

Article 25. Controllers

1. The company owner shall appoint between one and 3 controllers working for a term of office of up to 3 years. The number of controllers depends on the company's capital size, geographical scope and number of business lines. For a one-member limited liability company transformed from a parent company of a state economic group or corporation, 3 controllers shall be appointed. In case 2 or 3 controllers are appointed, the company owner shall appoint a person in overall charge to formulate working plans, assign or coordinate jobs of other controllers. Controllers may neither concurrently hold managerial or executive posts nor be related to managers or executive officers as specified at Points a. c and e. Clause 17, Article 4 of the Law on Enterprises.

2. Controllers have the tasks, powers and responsibilities and must meet the criteria and conditions specified in Article 71 of the Law on Enterprises and the company charter. They have the right to use the company's seal in performing the tasks prescribed by law and the company charter.

Article 26. Remunerations, salaries and other benefits of members of the Members* Council. Director General and controllers

1. Full-time members of the Members' Council, full-time controllers. Director General, Deputy Directors General (directors in charge of specific lines or domains) and the Chief Accountant will enjoy annual salaries. Part-time members of the Members' Council and part-time controllers will enjoy job-based or working time-based remunerations. Members' Council members, controllers. Director General. Deputy Directors General (directors in charge of specific lines or domains) and the Chief Accountant will enjoy term of office-based bonuses Salary and bonus levels depend on the company's business results and the efficiency and results of management, administration or control activities.

2. Salaries and bonuses shall be paid as follows:

a) Every month, full-time members of the Members' Council, full-time controllers. Director General. Deputy Directors General (directors in charge of specific lines or domains) and the Chief Accountant will be advanced 70% of salaries temporarily calculated for the month while the remaining 30% shall only be settled and paid at the year-end. Every year, Members' Council members, controllers, Director General. Deputy Directors General (directors in charge of specific lines or domains) and the Chief Accountant will be advanced 70% of bonuses for the year while the remaining 30% shall only be settled and paid upon the expiration of their term of office;

b)The remaining 30% of salaries and bonuses shall be paid based on the Ministry of Finance-promulgated regulations on the financial management of one-member limited liability companies and regulations on the supervision and appraisal of Members' Council members, controllers, Director General, Deputy Directors General (directors in charge of specific lines or domains) and Chief Accountant of one-member limited liability companies.

In case enterprise classification results and results of appraisal of the management, administration or control by the Members' Council and each individual member of the Members' Council, controllers, Director General, Deputy Directors General (directors in charge of specific lines or domains) and Chief Accountant are not up to requirements set in the financial management, supervision and appraisal regulations, Members' Council members, controllers. Director General, Deputy Directors General (directors in charge of specific lines or domains) and Chief Accountant who fail to meet requirements may not receive the remaining 30% of their annual salaries (for salaried ones) or the remaining 30% of their term of office's bonuses.

3. In case the Chairman of the Members' Council concurrently acts as Director General, he/she may receive only the salary for either post.

Section II

COMPANY MANAGEMENT ORGANIZED AFTER THE MODEL OF PRESIDENT

Article 27. Company President

1. The President of a company shall be appointed by the company owner to work for a term of office of up to 5 years and may be re­appointed or replaced. The President may concurrently act as Director General.

The company charter states that the President or Director General is the company's representative at law.

The President of a company shall exercise the rights and perform the obligations of the company owner on the latter's behalf; exercise the rights and perform the obligations of the company; and shall be held responsible before the owner and law for the exercise of his)her vested rights and performance of his)her assigned tasks.

2. The President has the following rights and tasks:

a) To organize the elaboration of and decide on development strategies; long-term, medium-term and annual plans of the company;

b) To decide on market, marketing and technological development solutions; investment projects, purchase and sale, borrowing, lending and other contracts valued at under 50% of total book asset value of the company or at a lower percentage stated in the company charter, or not exceeding the maximum value stated in the company charter.

c) To decide to establish, reorganize, dissolve or transform affiliate companies being one-member limited liability companies; one-member limited liability companies owned by affiliate companies whose charter capital is wholly held by the parent company; dependent units of the parent company; domestic or overseas branches and representative offices of the parent company under law.

d) To decide on tentative plans on raising capital amounts not exceeding the charter capital or a smaller value stated in the company charter, or not exceeding the maximum value level stated in the company charter.

e) To decide on organizational structure, business organization plans, internal management regulations and payrolls of the management apparatus.

f) To decide on appointment, dismissal or removal from duty of, signing of contracts with salaries and other benefits of the Director General (Director) of the company. To decide on the appointment, dismissal or removal from duty of, signing of contracts with, salaries and other benefits of Deputy Directors General (deputy directors or directors in charge of specific lines or domains) and Chief Accountant of the company at the request of the Director General (Director);

g) To examine and supervise the Director General in exercising his/her rights and performing his/her tasks:

h) To adopt annual financial statements; tentative plans on the use of profits after fulfillment of the company's tax obligation and other obligations; tentative plans on the offsetting of losses in business operations; and publicize financial statements under the Government's regulations;

i) To request the company owner to approve the company's important matters stated in the company charter;

j)To organize the implementation of decisions of the company owner;

k) To report to the company owner on the company's business results;

l) Other rights and tasks specified by law and the company charter.

3. The President's decisions on the following issues must be approved by the company owner:

a) Development strategies; long-term, medium-term or annual plans of the company; adjustment or addition of main business lines of the company;

b) Approval of investment projects; purchase and sale, borrowing or lending contracts and other contracts of a value exceeding the level specified at Point b. Clause 2 of this Article;

c) Decisions specified at Point c. Clause 2 of this Article; making of capital contributions to other companies; a change in the ownership structure of affiliate companies which will paralyze the dominating right of the company;

d) Adjustment of the company's charter capital; transfer of part or the whole of the company's charter capital to other organizations and individuals;

e) Approval of finalization reports; tentative plans on the use of profits after fulfillment of the tax obligation and other financial obligations of the company; tentative plans on the offsetting of losses in business operations:

g) Amendments and)or supplements to the company charter;

h) Appointment, dismissal, removal from duty of, or signing or termination of a contract with, the Director General;

i) Other matters specified in the company charter.

4. The President must satisfy the criteria specified for the Chairman of the Members' Council.

In case the President concurrently acts as Director General, he/she must satisfy the following conditions:

a) He/she is requested by the enterprise and expresses in writing his/her wish to do so;

b) He/she is physically fit and satisfies the criteria and conditions specified for both posts;

c) Functions, tasks, powers and responsibilities of the President and the Director General are specifically and separately stipulated;

d) He/she takes responsibility for his/her functions, tasks and roles as the President and the Director General.

Article 28. Director General

The Director General is the person administering the company's day-to-day operations according to the objectives and plans indicated in the company charter and resolutions and decisions of the President: and shall be held responsible before the President and law for the exercise of his/her vested rights and performance of his/her assigned tasks.

The Director General has the tasks and powers specified in Article 70 of the Law on Enterprises.

Article 29. Controllers

The number, term of office, tasks, powers, responsibilities, criteria and conditions of controllers comply with Article 25 of this Decree.

Article 30. Remunerations, salaries and other benefits of the President. Director General and controllers

The President, Director General, Deputy Directors General (directors in charge of specific lines or domains), controllers and the Chief Accountant of a company are entitled to remunerations, salaries and other benefits like Members' Council members. Director General. Deputy Directors General (directors in charge of specific lines or domains), controllers and the Chief Accountant as specified in Article 26 of this Decree. In case the President concurrently acts as Director General, he)she may receive only the salary for either post.

Chapter IV

MANAGEMENT AND SUPERVISION OF ONE-MEMBER LIMITED LIABILITY COMPANIES BY THEIR OWNERS

Article 31. Management and supervision of one-member limited liability companies by their owners

The State owner shall manage and supervise a one-member limited liability company in the following areas:

1. Fulfillment of operation objectives, tasks and orientations:

a) Operation objectives, business lines, development strategies, and production, business, investment and financial plans of the company:

b) Portfolio and investment in main business lines and lines unrelated to main business lines; and highly risky business lines, sectors, geographical areas and projects;

c) Supplying public-utility products and services;

d) Results of fulfillment of objectives and tasks assigned by the owner.

2. Capital and finance:

a) Capital preservation and development by the company;

b) Investments, debts and solvency of the company;

c) Results of financial operations, business efficiency and ratio of profit to state capital;

d) Total fund of salaries paid by the company; the company's average salary raise rate compared with the labor productivity increase rate:

e) Increase or transfer of part of the company's charter capital.

3. Organization and personnel:

a) The company's reorganization, dissolution and bankruptcy; change of the company's legal status: modification of the company charter; change of ownership structure of affiliate companies which will paralyze the company's dominating right;

b) The appointment, dismissal, removal from duty, company management objectives, tasks or contract, salaries, bonuses, task performance and results of operation of the Members' Council. President and controllers; the appointment, dismissal, removal from duty, signing of labor contract, salary, bonus, task performance and results of operation of the Director General.

4. Abidance by the owner's decisions and the company charter.

5. Other issues specified by the Law on Enterprises and relevant laws.

Article 32. Notification and reporting by the Members' Council and the President and responsibilities of the owner for responding to proposals of the Members' Council and the President

1. Notification and reporting by the Members" Council and the President to the owner:

a) Within 30 days after the end of a quarter or year, the Chairman of the Members' Council or the President shall send a written report on the company operation and business results as specified in Clause 14, Article 20 of this Decree and orientations for its operation in the coming period;

b) Within 5 working days after issuing a decision on the company's organizational structure and internal management regulation; salary grade and rank, basic salary and salary payment for employees and managers: commendation and disciplining of the Director General; or a matter subject to the company owner's approval as specified in this Decree, the

Chairman of the Members' Council or the President shall send a written report on such decision.

2. Within 30 days after receiving a report of the Members' Council or the President and a request for approval of a decision of the Members" Council as specified in Clause 12, Article 20, or of the President as specified in Clause 3. Article 27. of this Decree, the owner shall decide to approve in writing or issue a reply.

Chapter V

IMPLEMENTATION PROVISIONS

Article 33. Effect

1. This Decree takes effect on May 5. 2010.

2. This Decree replaces Decree No. 95/2006/ND-CP of September 8. 2006. on transformation of state companies into one-member limited liability companies.

Article 34. Responsibilities to implement and organize the implementation

1. Ministries, provincial-level People's Committees and Boards of Director of state corporations or parent companies of state economic groups shall schedule, direct and organize the transformation of state companies under their management into one-member limited liability companies so as to complete it before July 1. 2010. Enterprises currently undergoing equitization and expected to have their equitized values recognized by competent authorities before July 1. 2010. will not be transformed into one-member limited liability companies but continue carrying out procedures for equitization and business registration as joint-stock companies after July I. 2010.

2. Political organizations and socio-political organizations may apply this Decree in transforming enterprises of which they need to hold 100% of charter capital into one-member limited liability companies. Ministries and provincial-level People's Committees may apply certain provisions of this Decree in transforming their revenue-generating non-business units, which are ineligible for transformation into science and technology enterprises, into one-member limited liability companies after obtaining the Prime Minister's approval.

3. Agencies and organizations assigned or decentralized to exercise the rights and perform the obligations of the owner shall direct one-member limited liability companies transformed or founded before the effective date of this Decree in reorganizing their management and modifying their charters to comply with this Decree.

4. The Ministry of Planning and Investment, the Ministry of Finance, the Ministry of Labor. War Invalids and Social Affairs, the Ministry of Home Affairs and the Ministry of Agriculture and Rural Development shall coordinate with relevant agencies in guiding the implementation of this Decree.

5. Ministers, heads of ministerial-level agencies and government-attached agencies, chairpersons of provincial-level People's Committees and Boards of Directors of parent companies of state economic groups and corporations shall implement this Decree.

The Minister of Planning and Investment shall monitor the implementation of this Decree.